The Wealth Details tables provide background information on the calculations behind the Wealth Forecast. From any of the tables, you can click Export to export the information on the screen to a Microsoft Excel spreadsheet. You can also control the columns displayed by clicking the Manage columns button.
Each table has one or more Portfolio Value drop-down fields. Depending on the table, you can choose to view the median, 10th percentile or 90th percentile; future or current value; or view the current or target asset allocation.
Click the drop-down field in the upper left-hand corner of the window to toggle between the following views:
The Wealth Table has six columns: Year, Beginning Balance, Additions, Withdrawals, Investment Gains/Losses and Ending Balance. For more information on these figures, see the Income and Expenses and Additions and Withdrawals tables.
The Wealth Percentiles table displays the portfolio value of the current and target asset allocations at one year, three years, five years, ten years and twenty years. Estimates for the 95th, 75th, 67th, 50th, 33rd, 25th and 5th percentiles are included. Below the table, the percentile ranges for the current and target allocations are plotted as bars on a graph.
The Wealth Percentiles table displays portfolio returns (percentages) for the current and target asset allocations at one year, three years, five years, ten years and twenty years. Estimates for the 95th, 75th, 67th, 50th, 33rd, 25th and 5th percentiles are included. Below the table, the percentile ranges for the current and target allocations are plotted as bars on a graph.
The Income and Expenses table breaks out the figures used to calculate Total Income and Total Expenses. Inflation for these figures is either run-specific or long-term. Run-Specific means that inflation is pulled at random from one of the thousands of runs in the Monte Carlo simulation. Run-specific figures will not follow a steady increase year over year. Long-term indicates a consistent rate and reflects steady, incremental increases over time with no simulations.
|
Data Point |
Inflation Type |
|
Pre-retirement |
Long-term |
|
Secondary |
Long-term |
|
Pensions |
Run-specific |
|
Cash Flow |
Run-specific |
|
Retirement Needs |
Long-term |
|
Education Expenses |
Long-term |
|
Miscellaneous Expenses |
Run-specific |
Retirement needs are based on both the client and member being added to the plan, and their retirement needs entered. In two person cases, the Wealth Forecast Engine assumes that once a need starts, it continues until the end of the simulation. Even at the time of death for one of the participants, the retirement need will not change or be affected by this action. It is assumed that the total retirement needs will still exist, even if there is only one person remaining.
Example:
Retirement Need: Husband = $50,000, Wife = $50,000
Current value of retirement need will always be $100,000 regardless of a participant passing away in any given year.
The Additions and Withdrawals table breaks out the figures used to calculate Total Income and Total Expenses. Inflation for these figures is either run-specific or long-term. Run-Specific means that inflation is pulled at random from one of the thousands of runs in the Monte Carlo simulation. Run-specific figures will not follow a steady increase year over year. Long-term indicates a consistent rate and reflects steady, incremental increases over time with no simulations.
|
Data Point |
Inflation Type |
|
Social Security |
Run-specific |
|
Pensions |
Run-specific |
|
Taxes* |
Long-term |
|
Account Contributions |
Run-specific |
*Assumptions and rules for tax details are updated annually by Ibbotson Associates and calculated using the Wealth Forecasting Engine.
(Social Security + Pensions) - Expenses - Taxes - Deficit Paid = Surplus/Shortfall
Secondary Income/Cash Flow Other Income +/- Surplus/Shortfall = Additions
If (Surplus/Shortfall + MRDs) > 0
Insurance/Secondary Income/Cash Flow + Account Contributions + Surplus/Shortfall + MRDs = Additions
Else if </=0
Insurance/Secondary Income/Cash Flow + Account Contributions = Additions
Account Contributions + MRDs + Annual Fees = Withdrawals
If (Surplus/Shortfall + MRDs) > 0
Annual Fees + MRDs = Withdrawals
Else if </=0
(-Surplus/Shortfall) + Annual Fees = Withdrawals
The Tax table provides detailed annual tax data for a variety of different data points. Data points include:
|
Data Point |
Description |
|
Fed Income |
Federal Income Tax on Non-Salary Events, including:
|
|
Fed Cap Gain |
Federal Capital Gain Tax including:
|
|
State Income |
State Income Tax on Non-Salary Events including:
|
|
State Cap Gain |
State Capital Gain Tax including:
|
|
Taxes Incurred |
Annual Tax Bill for Non-Salary Events, which equals:
|
|
Taxes Withheld |
Required withholding on distributions from qualified accounts
|
|
Tax Withdrawn Penalty |
The penalty on money withdrawn prematurely from a fixed-term investment,such as:
|
|
Taxes Due |
The amount of taxes dues and payable, which equals:
|
|
Taxes Paid |
The amount of taxes actually paid in a year, which equals:
|